Financial and Salary Adjustment Update
July 12, 2022
Dear Colleagues,
We want to make you aware of several things that will require careful financial management over the next year.
First, we experienced a small decline in our enrollment during the 2021-22 academic year, and this decline created a revenue shortfall of $8.4 million. As we approach the end of FY22 (August 31), this revenue shortfall will need to be covered with institutional reserves, which will reduce some of the financial flexibility we have had these last few years.
Second, we are also facing a 7.5% increase in UT Select insurance premiums for FY23 — a cost of $3.3 million — that must be borne either by those being insured (what most institutions will likely do now and in the future) or by the institution itself. Fortunately, we have developed a temporary solution to relieve our employees with insured dependents (the people whom this increase will affect) of this cost burden in the near-term (outlined below).
Lastly, as you may know, we benchmark our tuition and mandatory fees alongside Pell and Texas Grants, with UTRGV’s tuition/fees always falling below the payout for a full Pell/Texas Grant. Further, an increase in the payout for either grant typically triggers a corresponding increase in our tuition/mandatory fees. Although Congress authorized a $400 increase for a full Pell Grant for next year, there is no authorization for increases in tuition/mandatory fees in Texas for FY23. The inability to increase tuition/mandatory fees by a similar amount means that UTRGV is unable to collect a potential $8 million in revenue during FY23.
We are still investing in you!
On their own, these three factors are difficult to handle in any given year. But when combined like this, they undoubtedly create some unique challenges for us to navigate. Nevertheless, UTRGV remains in good financial shape because of careful planning, prudent use of resources over the last few years, and the steady reduction of our administrative cost ratio from 10.97% when we opened in FY16 to 5.89% for FY21.
As a result, pending final approval of our budget by the Board of Regents in August, we will make the following investments in UTRGV faculty and staff during FY23:
- A 2% merit program for faculty and staff will be implemented in September 2022.
- Completion of phase 2 of the staff market and equity salary adjustment that began in September 2021.
- A one-time subsidy equivalent to the 7.5% increase in UT Select insurance premiums for all employees whose income is $125,000 or less and who have elected coverage for either (1) Employee and Spouse, (2) Employee and Children, or (3) Employee and Family. This will ensure that merit/equity adjustments received by these faculty and staff members are not impacted by the increase in insurance premiums.
- An increase to the hourly rate for all student workers from $8 to $12 to help our students cope with the impacts of inflation. Student workers who enrolled in at least one course over the summer sessions have already been earning this higher wage.
- Finally, UTRGV is also investing in our future leaders by offering the new Masters in Higher Education Administration program (launching this fall) to eligible employees for free.
More information regarding the merit and the market and equity adjustments, the increase in insurance premiums and the subsidy for it, and the new master’s program will be emailed in the near future.
We are proud to be able to, once again, make investments such as these, despite current financial conditions. The investments reflect our commitment to offering competitive salaries and to supporting faculty and staff as they progress in their careers. It is worth noting that UTRGV has invested either in merit and/or market and equity every year since FY17 (AY 16-17). Over this period, UTRGV has invested an average of $6M a year for a total investment of $41.4 million in additional compensation for faculty and staff in support of our commitment. That said, we are not yet where we want to be, but we will continue to make as much progress as we can each year until we get there.
Thank you for all you’ve done — and continuously do — to advance UTRGV’s mission.
Sincerely,